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US Port Strikes - Fact Sheet – 4 October 2024
Published: 04 October 2024
US East and Gulf Coast port strike
4 October 2024
- The ILA and USMX have agreed a temporary agreement that will keep the longshoremen working until 15 January while the final agreement is negotiated. It appears that a 61.5% salary increase over six years has been agreed but that there still is no agreement regarding automation of ports.
3 October 2024
- As the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) failed in concluding a new agreement before the old one expired on 30 September, the ILA members are now on strike
- The ILA and USMX appear to disagree on the salary increase for the new six-year deal but also whether automation of ports should be allowed
- On Sunday, President Joe Biden again confirmed that he will not invoke the Taft-Hartley Act to force the longshoremen back to work. On Tuesday, he issued a statement saying, “It is time for USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they’ve been making to our economic comeback.”
- The strike impacts all US ports on the Atlantic Coast and Gulf Coast. About 60% of US container imports and exports move through these ports, equal to an estimated 12% of global container traffic
- Nearly 10% of container ships and about 15% of container ship capacity are deployed in the trade lanes in and out of East and Gulf Coast ports. Therefore, the strike severely impacts the global service networks. Maersk has estimated that one week’s shutdown would take four to six weeks to recover from
- Outside of the US, especially the Europe & Mediterranean and Central & South American regions are impacted. More than 10% of the Europe & Mediterranean region’s container exports flow through the ports whereas more than 15% of the Central & South America region’s container imports and exports are affected
- During the strike, some shippers may try to divert cargo to US West Coast or Canadian ports. However, there is a limit to how much cargo can be diverted before those ports as well as intermodal links also clog up
- Spot and short-term freight rates are likely to climb as ships wait outside US ports and capacity becomes scarce elsewhere. Liner Operators have already announced freight rate surcharges to cover the additional operational costs that could be incurred due to the disruption.
This article will be updated whenever there is new information
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